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Hamilton was founded by copper kingMarcus Daly in the late 19th century. It was named for J.W. Hamilton, who provided the right-of-way to the railroad.[7] Daly is said to have wanted to begin business in the then county seat of Grantsdale, but was denied the opportunity. He supposedly founded Hamilton out of his own pocket as a reaction to being rebuffed at Grantsdale.

In the summer of 2000, Hamilton made international headlines when forest fires throughout the Bitterroot Valley filled the area with smoke and prompted the evacuation of many residents. President Clinton declared a state of emergency in the area and dispatched National Guardsmen to assist with fighting the fires.

Hamilton is, as of 2004, home to two microbiological research and production facilities: the government-run Rocky Mountain Laboratories, and a branch of the Corixa Corporation (bought in the late 1990s from Ribi ImmunoChem Research, Inc.). The Corixa Corporation was bought by GlaxoSmithKline in 2005. NIAID completed construction of a Biosafety Level 4 biohazard laboratory as part of the Rocky Mountain Laboratories (RML) facility in 2008. This facility has begun operations using highly-pathogenic organisms including the Lentivirus family of viruses.[8]

As of the census[2] of 2010, there were 4,348 people, 2,175 households, and 1,006 families residing in the city. The population density was 1,718.6 inhabitants per square mile (663.6/km2). There were 2,456 housing units at an average density of 970.8 per square mile (374.8/km2). The racial makeup of the city was 95.0% White, 0.3% African American, 0.6% Native American, 1.4% Asian, 0.2% from other races, and 2.5% from two or more races. Hispanic or Latino of any race were 3.1% of the population.

There were 2,175 households of which 23.6% had children under the age of 18 living with them, 30.6% were married couples living together, 11.7% had a female householder with no husband present, 3.9% had a male householder with no wife present, and 53.7% were non-families. 47.0% of all households were made up of individuals and 22.8% had someone living alone who was 65 years of age or older. The average household size was 1.92 and the average family size was 2.72.

The median age in the city was 43 years. 20.1% of residents were under the age of 18; 7.4% were between the ages of 18 and 24; 24.4% were from 25 to 44; 23.4% were from 45 to 64; and 24.7% were 65 years of age or older. The gender makeup of the city was 46.6% male and 53.4% female.

As of the census[13] of 2000, there were 3,705 people, 1,772 households, and 855 families residing in the city. The population density was 1,603.6 people per square mile (619.3/km²). There were 1,915 housing units at an average density of 828.8 per square mile (320.1/km²). The racial makeup of the city was 96.22% White, 0.11% African American, 0.89% Native American, 0.78% Asian, 0.22% from other races, and 1.78% from two or more races. Hispanic or Latino of any race were 1.65% of the population.

There were 1,772 households out of which 22.3% had children under the age of 18 living with them, 36.3% were married couples living together, 9.5% had a female householder with no husband present, and 51.7% were non-families. 47.6% of all households were made up of individuals and 24.9% had someone living alone who was 65 years of age or older. The average household size was 1.95 and the average family size was 2.81.

In the city the population was spread out with 20.2% under the age of 18, 6.8% from 18 to 24, 24.0% from 25 to 44, 20.6% from 45 to 64, and 28.3% who were 65 years of age or older. The median age was 44 years. For every 100 females there were 82.2 males. For every 100 females age 18 and over, there were 74.9 males.

The median income for a household in the city was $22,013, and the median income for a family was $30,665. Males had a median income of $25,795 versus $22,138 for females. The per capita income for the city was $14,689. About 14.3% of families and 17.8% of the population were below the poverty line, including 28.4% of those under age 18 and 15.3% of those age 65 or over.